Iron ore rail freight set to increase 5%

NEW DELHI: Freight cost for iron ore is set to increase following the reclassification of products by the Railways. The move would increase the transportation charges of iron ore by about 5-6%.

As iron ore price makes up 30% of steel cost, higher freight could further impact prices of the alloy that have risen by a third in the past few months.

The Railways, however, cut port congestion surcharge from 60% to 30% (levied on ore moving from source to ports) on ore meant for domestic use, while increasing the surcharge for ore meant for exports to 100% with immediate effect.

"The move would further push up input cost for steel makers," an official of a large private sector steel company said.